Uphill Battle to Keep College Students Loyal

They are the target of billions of dollars in marketing, but the more than 5.5 million students at four-year colleges across the U.S. appear to respond to brand messages the same way they do to their more boring lectures: They're in one ear and out the other, according to a new study from marketing consultancy Brand Keys, New York.

By the time they don the cap and gown, students generally have avoided making lasting brand preferences in categories such as long-distance phone service, fast food and wireless. Overall, student respondees to Brand Keys' poll said they were unlikely to be loyal to brands in 70 percent of the categories that marketed to them in school. (As much as $300 million is spent on advertising in college media alone every year, according to Ridgewood, N.J.-based consultancy Student Marketing LLC.)

"Once they leave the rarified atmosphere of college and go out into what we laughingly call the real world, their entire environment changes," said Robert Passikoff, president of Brand Keys. "What you're seeing is a model that is describing how customer values change once they enter a new life stage."

Brand Keys generated the survey from 2,273 students and a matched sample of 2,400 graduates taken from its Customer Loyalty Index, which is collected twice a year from a pool of 16,000 regular brand users. Students from 52 schools, divided evenly between public and private, were interviewed in 17 categories during college and after graduation.

Long-distance phone carriers fared the worst in terms of loyalty: Only 1 in 12 respondents said they would remain loyal to their service. Whereas the cheapest service might have been best for the undergrads, that criterion may not apply to graduates who have more disposable income.

"They now have a wider range of options," said Passikoff. "[Long distance] is also the category, out of all 17 we looked at, that has the greatest difficulty differentiating itself in terms of brands—especially among this target audience." Verizon was the overall loyalty leader among all respondents in this category; Qwest ranked last.

Fast food was the second-poorest performer in terms of loyalty, with 1 in 10 consumers saying they would remain loyal. Late-night, low-cost fare appears to lose some of its luster once study sessions are over, said Passikoff. "Their tastes change," he said. "There is a greater emphasis placed on health. Plus, there are a lot of microwavable foods that are easy to make and actually taste good." Subway ranked first in the category; Taco Bell ranked last.

Wireless service and mobile phone makers find only 1 in 9 customers saying they will be loyal after graduation. "They may be more interested in a good connection rather than just price," said Passikoff. "It's a technology thing as well. These are the early adopters that are interested more in technology than the brand itself. This is the audience that made camera phones and text messaging a success." Verizon Wireless and Samsung Mobile Phones ranked first in their respective categories.

The most stable categories, meanwhile, are computers and online book/music sites, with half of respondents saying they will remain brand loyal. "Generally, the technology companies are ahead of the curve. They take the lead and drive consumer need," said Passikoff. "Dell and Apple are the two loyalty leaders in the category, because of their ability to innovate." Amazon.com was the No. 1 e-commerce site.

Credit cards, snacks and beer also scored well. "Credit cards just stay in your wallet. There's no big change, unlike banks, which are local in nature," Passikoff said. "Plus, there are only a limited number of providers. Consumers are less likely to make their decision based on brand and more likely to focus on their continuity programs like air miles."

They are the target of billions of dollars in marketing, but the more than 5.5 million students at four-year colleges across the U.S. appear to respond to brand messages the same way they do to their more boring lectures: They're in one ear and out the other, according to a new study from marketing consultancy Brand Keys, New York.

By the time they don the cap and gown, students generally have avoided making lasting brand preferences in categories such as long-distance phone service, fast food and wireless. Overall, student respondees to Brand Keys' poll said they were unlikely to be loyal to brands in 70 percent of the categories that marketed to them in school. (As much as $300 million is spent on advertising in college media alone every year, according to Ridgewood, N.J.-based consultancy Student Marketing LLC.)

"Once they leave the rarified atmosphere of college and go out into what we laughingly call the real world, their entire environment changes," said Robert Passikoff, president of Brand Keys. "What you're seeing is a model that is describing how customer values change once they enter a new life stage."

Brand Keys generated the survey from 2,273 students and a matched sample of 2,400 graduates taken from its Customer Loyalty Index, which is collected twice a year from a pool of 16,000 regular brand users. Students from 52 schools, divided evenly between public and private, were interviewed in 17 categories during college and after graduation.

Long-distance phone carriers fared the worst in terms of loyalty: Only 1 in 12 respondents said they would remain loyal to their service. Whereas the cheapest service might have been best for the undergrads, that criterion may not apply to graduates who have more disposable income.

"They now have a wider range of options," said Passikoff. "[Long distance] is also the category, out of all 17 we looked at, that has the greatest difficulty differentiating itself in terms of brands—especially among this target audience." Verizon was the overall loyalty leader among all respondents in this category; Qwest ranked last.

Fast food was the second-poorest performer in terms of loyalty, with 1 in 10 consumers saying they would remain loyal. Late-night, low-cost fare appears to lose some of its luster once study sessions are over, said Passikoff. "Their tastes change," he said. "There is a greater emphasis placed on health. Plus, there are a lot of microwavable foods that are easy to make and actually taste good." Subway ranked first in the category; Taco Bell ranked last.

Wireless service and mobile phone makers find only 1 in 9 customers saying they will be loyal after graduation. "They may be more interested in a good connection rather than just price," said Passikoff. "It's a technology thing as well. These are the early adopters that are interested more in technology than the brand itself. This is the audience that made camera phones and text messaging a success." Verizon Wireless and Samsung Mobile Phones ranked first in their respective categories.

The most stable categories, meanwhile, are computers and online book/music sites, with half of respondents saying they will remain brand loyal. "Generally, the technology companies are ahead of the curve. They take the lead and drive consumer need," said Passikoff. "Dell and Apple are the two loyalty leaders in the category, because of their ability to innovate." Amazon.com was the No. 1 e-commerce site.

Credit cards, snacks and beer also scored well. "Credit cards just stay in your wallet. There's no big change, unlike banks, which are local in nature," Passikoff said. "Plus, there are only a limited number of providers. Consumers are less likely to make their decision based on brand and more likely to focus on their continuity programs like air miles."